Level 3 (LVLT) Chairman and CEO James Crowe acknowledges that the company “stubbed its toe” this year but says the emerging IP optical and wireless markets are “what we’ve been planning on and hoping for, for a number of years.” Crowe spoke Wednesday at CitiGroup’s Annual Global Entertainment, Media & Telecommunications Conference. Telephony World provides a summary of Crowe’s presentation, including some interesting comments about Level 3’s ambitions in content delivery:
The content distribution business is the long-term game for Level 3, which is why the company has acquired intellectual property in this realm as well as deployed caching and storage globally. “Content distribution is where we are focusing our effort,” Crowe said. “We believe very firmly that in the longer term, the larger majority of traffic on IP will be large objects, big video-based communications, either file-based or streamed, real-time or batched. It is already almost 50% of the traffic on our network today.”
That attitude is reflected in Level 3’s approach to pricing, which we’ve noted as it unveiled its caching and downloading and video streaming CDN services, which will cost the same as Level 3’s high-speed Internet access. Level 3 owns its own backbone, which gives it a different cost profile than other CDNs who must buy transit. Level 3 expects those economics can help it build a beachhead in the CDN business. But it’s a big beach and getting bigger.